New Mexico Gov. Michelle Lujan Grisham is pushing the Biden administration for an exemption from its shutdown of oil-and-gas production on federal lands, citing her climate-friendly policies in a state heavily dependent on fossil-fuel revenue.
The Democratic governor said Wednesday that her staff had a “long conversation with stakeholders from the Department of Interior” about creating an exemption for states that have supported renewable energy and enacted tough environmental regulations on drilling.
“The basic strategy here is this: Since you’ve already made the announcement, backtracking on that may create some policy issues,” she said in a Zoom address to the Greater Albuquerque Chamber of Commerce, which is posted on YouTube.
She continued: “So create a program that gives credit to states that are well beyond where the federal government and other states are in terms of climate-change initiatives, cleaning up the environment, curbing carbon emissions, and having an all-of-the-above energy effort.”
If the administration agrees, she said, “New Mexico’s going to get an exemption, a waiver.”
Such a carve-out would help resolve a sticky political situation for Ms. Lujan Grisham, who more than any other governor finds herself caught between the Biden administration’s aggressive climate-change agenda and her state’s heavy reliance on oil-and-gas revenue from federal leases.
Ms. Lujan Grisham’s comments came in response to a question about two executive actions: the Jan. 20 Interior order suspending agency decisions on drilling permits for 60 days, and President Biden’s Jan. 27 executive order placing an indefinite “pause” on new oil-and-gas leases on federal lands and waters.
Ms. Lujan Grisham said the leasing directive was issued with “very little guidance.”
“I believe the Biden administration intends for this to be an all-of-the-above and a transition to renewable energy,” she said. “Now, with all that said, I’m clearly concerned that right out of the gate, with very little guidance, we have an announcement to stall, right, a moratorium on lease applications.”
The beneficiary has been neighboring Texas, which has little federal land, versus 34% in New Mexico. Both states sit atop the shale-rich Permian Basin, but about 55% of oil-and-gas wells in New Mexico are located on federal acreage.
“The reality is a lot of oil and gas right in the Permian is on private land in Texas,” Ms. Lujan Grisham said, meaning that drilling rigs “can simply just move, and that just hurts New Mexico. And there are no environmental standards there.”
While Texans might disagree with that assessment, she argued that New Mexico has “the strongest methane rules right now in the country and one of the most robust investments and transitions to renewable energy.”
New Mexico accounts for 57% of federal onshore oil production and 31% of federal onshore natural gas, according to the American Petroleum Institute.
“I mean, we’re doing all the things they aspire to do at the federal level,” the governor said.
An Interior spokesperson declined to comment on the governor’s exemption proposition, but Western Energy Alliance President Kathleen Sgamma took issue with the idea of giving preferential treatment to certain states.
“We do not support an exemption for New Mexico or any other state, except as it strengthens our case in court,” said Ms. Sgamma, whose group sued Jan. 27 to block the Biden leasing ban.
“Treating one state differently from others based on politics would help us show the court how arbitrary and fundamentally unsupported by law the leasing ban is,” she said. “This notion that New Mexico is somehow more virtuous from a regulatory standpoint than Colorado, Wyoming, North Dakota or any other public lands state is not factually accurate.”
Larry Behrens, Western states director of Power the Future, which called Jan. 22 for New Mexico to seek an exemption to the Interior permitting order, said he was glad to see the governor “finally admit Joe Biden’s orders are bad for our state.”
“It’s clear Joe Biden is attacking the energy industry just as he promised during his campaign,” Mr. Behrens said. “That’s why it is baffling, and more than little hypocritical, to see Lujan Grisham seek shelter from Biden’s orders after being one of his biggest advocates.”
A federal leasing ban could cost New Mexico more than 62,000 jobs by 2022 and place at risk $1.1 billion in federal revenue sharing, delivering a blow to the state’s annual budget, 39% of which is funded by oil-and-gas production, according to a September analysis by API.
In a Feb. 9 letter, New Mexico energy secretary Sarah Cottrell Propst asked the Biden administration to clarify “confusion” over the Jan. 20 agency permitting freeze, saying the uncertainty had already pushed rigs into Texas.
“Here’s what we’ve done: We initiated both conversations and a big, strongly worded letter that this doesn’t make any sense,” Ms. Lujan Grisham said, adding “it’s an economic problem with the state, but rather, it’s also a message to states to not do anything and wait for you to do it, and you’re not going to get as far, as fast.”
Last month, the Interior Department emphasized that tribes are exempt from its secretarial directive after the Ute Indian Tribe blasted it as a “direct attack” on sovereignty. Mineral development represents the tribe’s largest revenue source.
“Tribal nations are exempt from this guidance on public lands,” Ms. Lujan Grisham noted. “I feel as optimistic as I can that we win this. I just don’t know what the win exactly is going to look like.”
• Valerie Richardson can be reached at email@example.com.
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